Aaron Karp
ATW
Trump Administration Calls for ATC To Be Spun Off from FAA by 2021
May 23, 2017

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The Trump administration has given its full backing to the creation of a “non-profit, independent corporation” separate from FAA to manage US air traffic control (ATC), proposing that the new entity be operational by 2021 after a “multi-year” transfer.

The White House’s fiscal year 2018 budget proposal, released May 23, specifically highlights ATC reform, providing a “fact sheet” on the proposal—one of only four fact sheets provided by the administration along with the proposed budget. While a budget blueprint issued in March included the administration’s support for spinning off ATC from FAA, the full budget proposal fleshes out more details and indicates that ATC reform will be a major priority for the administration.

The White House Office of Management and Budget (OMB) characterized 2016 legislation introduced by House of Representatives Transportation and Infrastructure Committee chairman Bill Shuster (R-Pennsylvania), which called for separating ATC from FAA, an “excellent starting point” for discussing ATC reform, adding, “A non-profit, independent corporation is the best model to deliver air traffic services in a safe, efficient and innovative manner.”

In the May 23 budget proposal, OMB stated: “This transformative undertaking will create an innovative corporation that can more nimbly respond to the demand for air traffic services, all while reducing taxes and government spending. The parts of FAA that will remain with the government will retain important aviation safety regulatory activities.”

The administration estimates that separating ATC from FAA will save the US federal government more than $10 billion annually. “The government will retain its role in regulating aviation safety, as it does for all other modes of transportation,” OMB emphasized.

OMB noted that 60 countries “have successfully ‘spun-off’ their day-to-day air traffic management responsibilities from government agencies to corporations,” and specifically pointed to the example of NAV Canada: “Canada successfully privatized its air traffic management functions more than 20 years ago and has realized numerous benefits. The non-profit NAV Canada corporation, the world’s second-largest air navigation service provider, has improved safety, retained the same rates for customer charges over the past 17 years, rebuilt infrastructure, and developed cutting-edge air traffic technology.”

OMB said the independent US ATC entity should be governed by “a board of directors that represents all users of the National Airspace System.” The new ATC entity should be funded by “a fee structure that allows aviation users to pay the cost of the services to the air navigation service provider,” OMB said, describing this as “a more efficient funding model than the current mix of excise taxes.”

OMB said the current ATC system is safe, but warned that FAA “is challenged increasingly to address the quickly evolving needs of the nation’s airspace users.”

The Trump budget proposal is part of a legislative process that will play out over the summer and perhaps beyond. The US government’s next fiscal year starts Oct. 1, 2017.